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4 Estate Tax Planning Strategies: How to Protect Your Legacy

Admin • December 22, 2023

You’ve worked hard to preserve and grow your wealth through the years, and you aspire to transfer your financial achievements as a legacy to your family and heirs. Unfortunately, estate taxes can significantly impact the wealth you intend to pass on. 

Understanding these taxes and their importance in making estate decisions can lead to more deliberate and effective estate planning. And incorporating tax strategies into your planning efforts can help you secure and preserve your legacy for future generations to come.

Understanding Estate Taxes

Estate taxes are commonly referred to as the “death tax,” and are defined by the government as a tax on your right to transfer property at your death . Your property consists of everything you own, including cash and securities, real estate, trusts, insurance, annuities, any business interests, and other assets.

Tax laws change constantly, and the thresholds and exemptions that determine your tax liability shift accordingly. In general, estate taxes must be paid when your estate is worth more than the current year’s exemption. The 2023 federal estate tax exemption is $12.92 million per individual, or $25.84 million for married couples.

Also known as the lifetime estate and gift tax exemption, this amount will increase to $13.61 million for 2024, or $27.22 million for couples. This means that if your estate is valued less than the exemption limit at the time of your passing, your heirs won’t owe taxes on your estate.

Individual states can levy their own estate taxes in addition to federal taxes, and some states may also have an inheritance tax that the beneficiary must pay. It’s important to stay informed of the latest tax rules and regulations and how they can potentially affect your estate.

Estate taxes can have a substantial impact on the wealth that is passed down to beneficiaries. Without a carefully crafted estate plan, a significant portion of your assets may be taxed, diminishing the legacy that you’ve worked so hard to establish. 

4 Estate Tax Planning Strategies

Estate tax planning can be a complex process, involving a variety of strategies to help minimize the tax burden on your estate and make the most of your legacy.

Carefully reviewing your assets and liabilities is a foundational step in estate tax planning. Evaluate all your assets, including savings, investments, real estate, personal property, and business interests, as well as any existing debts and liabilities. Understanding the composition and value of your estate is important to accurately assess your potential tax liabilities.

A comprehensive overview of your estate helps lay the groundwork for your planning and allows you to make informed decisions on gifting, trusts, and other estate tax planning strategies.

1. Be Strategically Generous 

Strategic gifting during your lifetime is a powerful tool in estate tax planning; both the annual and lifetime gift exemptions can help reduce the taxable value of your estate. Gift tax applies to the transfer, by gift, of any type of property, and is generally only paid on the amount that exceeds the lifetime exemption.

The annual gift exemption allows you to gift up to a certain amount each year to any individual; taking advantage of this exemption enables you to transfer your wealth gradually, without any tax implications. The annual gift exclusion before taxes are triggered in 2023 is $17,000 per person, or $34,000 for a married couple (in 2024, this amount will increase to $18,000 for individuals and $38,000 for married couples.) This exclusion is per gift, per recipient , not the total amount of all your gifts: for every family member or individual you wish to gift, you can give each one an amount up to the annual exclusion.  

If you gift over the annual gift exclusion, the excess amount is added to your lifetime estate and gift exemption. Once you’ve exceeded your lifetime exemption, you may be subject to taxes. 

The benefit of the lifetime exemption is that it enables you to gift larger amounts and assist with costly expenses like higher education or the purchase of a home, without incurring tax liability.

2. Establish Trusts

Trusts are another key component of estate tax planning strategies, as they offer unique features that help minimize the tax burden on your heirs. There are various types of trusts available, and understanding their distinctions and how they may complement your individual objectives is an essential part of estate planning.

In general, irrevocable trusts can offer asset protection by removing designated assets from your taxable estate. Your assets are held and distributed according to specific terms in your irrevocable trust, essentially shielding them from estate taxes. Irrevocable trusts include irrevocable life insurance trusts (ILITs), Grantor-retained annuity trusts (GRATs), spousal lifetime access trusts (SLATs), and qualified personal residence trusts (QPRTs).

Be mindful that irrevocable trusts are irrevocable – once set up, making any changes to the trust can be a complicated process. Irrevocable trusts also require you to give up control of those assets that are transferred into the trust, so it’s important to carefully consider the way you want to structure your trust.

Revocable trusts offer more flexibility and control during your lifetime, but any assets within these trusts are still considered part of your taxable estate. While there are no tax advantages like with irrevocable trusts, revocable trusts establish a seamless transfer of assets upon your passing, and simplify the distribution process by allowing your heirs to avoid probate.

3. Consider a Family Limited Partnerships

Creating a family limited partnership (FLP) can help minimize estate tax for family-owned businesses or assets by establishing a general partnership with your heirs and family as limited partners. FLPs allow you to transfer your assets while still retaining control over them, but your partners will own a portion of these assets. An FLP will decrease the size of your estate and can help preserve family wealth.

4. Offset Your Taxes with Charitable Giving

Charitable giving allows you to give back to society, and make an impactful contribution to your community or to causes that are meaningful to you. Through your charitable giving, you can also benefit from valuable tax advantages, as your charitable donations can reduce your taxable estate.

As part of your estate tax planning strategy, you can consider establishing donor-advised funds (DAFs), charitable trusts, or private foundations. These charitable giving strategies can further enhance the tax efficiency of donating to charitable organizations, and help you create a lasting legacy of goodwill and making a difference.

Estate Planning with Five Pine Wealth Management

Estate planning is an integral part of your financial planning, helping to protect and preserve your wealth for future generations. Carefully implementing estate tax planning strategies that are right for your objectives can ensure that your legacy endures for many more years.

Working with a financial professional can help you navigate the changing landscape of tax laws and the complexities of estate planning. At Five Pine Wealth Management , we are fiduciary advisors who work alongside you to develop a holistic financial and estate plan that is tailored to your needs, risk tolerance, and goals. We will always have your best interests in mind with every recommendation we make. To see if we can help you, please email us or call: 877.333.1015.

The Best Long-Term Investment Strategy? Stay Invested, Stay Calm

June 20, 2025
When markets are calm, investing can feel easy. You contribute regularly, watch your portfolio grow, and start picturing that future vacation home or early retirement. But when markets get volatile, everything changes. Suddenly, headlines are full of dire warnings. Account balances fluctuate. And the urge to do something can feel overwhelming. At Five Pine Wealth Management , we understand how emotional investing can become during periods of market uncertainty. One of the most important things we do as fiduciary financial planners is to help our clients stay grounded when the market gets choppy. Let’s walk you through how we approach investment risk management and why having a clear, disciplined philosophy matters most when volatility strikes. Our Philosophy: Think Long-Term, Not Next Week When markets are moving fast, it is easy to think that the “best long-term investment strategy” must involve taking action to avoid losses or chase gains. The reality is usually the opposite. Reacting to market noise can often do more harm than good. In fact, one of the greatest risks to long-term returns is making emotional decisions in response to short-term events. We coach our clients to stay focused on their long-term financial plans and goals. Volatility is a feature of markets, not a flaw. By designing portfolios with realistic expectations for ups and downs, we help clients stay invested through all market environments. Here is what this looks like in practice: We use broadly diversified portfolios built around low-cost ETFs. We focus on asset allocation aligned with your time horizon, goals, and risk tolerance. We do not chase trends or attempt to time the market. We regularly review and rebalance portfolios based on your financial plan, not headlines. In short, your portfolio is designed to ride out volatility, not avoid it entirely. Fiduciary Financial Planning: Advice in Your Best Interest There is a great deal of noise in the financial world, particularly during turbulent market conditions. One of the most significant ways we help cut through it is by being fiduciary financial planners. That means we are legally and ethically obligated to act in your best interest at all times. We are also fee-only advisors. We do not receive commissions for recommending one investment over another. Our primary agenda is to help you reach your goals. During market volatility, this matters more than ever. Too many investors fall prey to sales pitches disguised as “solutions” to market risk. We focus on education and long-term planning rather than quick fixes. Being a fiduciary allows us to focus on what serves you best: Keeping you aligned with your personal goals and values Helping you tune out market noise and media hype Offering sound, research-backed guidance without conflicts of interest Your Coach Through Emotional Market Cycles One of our most important roles as financial planners is helping clients manage the psychological side of investing. It is one thing to know, intellectually, that markets will recover over time. It is another thing to watch your portfolio drop 15% and not feel anxious. Market downturns create powerful emotions. Fear. Doubt. Sometimes, even panic. As humans, our instinct is to take action to relieve those feelings, even when the logical course is to stay invested. That is where we come in. We help coach clients through these moments so they can avoid costly mistakes like: Selling during a downturn and locking in losses Chasing the next hot trend during a rebound Over-concentration in “safe” assets out of fear We remind clients that volatility is a normal part of the market. Markets have experienced recessions, wars, pandemics, and political turmoil before. They will again. Over time, markets have historically rewarded patient investors who stayed the course. When you work with us, you gain a trusted partner who is here to talk through your concerns, offer perspective, and help you make decisions that serve your long-term goals. Why Staying the Course Actually Works It may seem counterintuitive, but reducing activity during market volatility often yields better outcomes. Consider this: From 1999 through 2018, if an investor missed just the 10 best days in the S&P 500, their overall return would have been cut nearly in half . Many of the best market days happen very close to the worst ones. Trying to time the market is a challenging task, even for seasoned professionals. By maintaining a disciplined investment approach and staying fully invested, you ensure that you are there for both the recoveries and the long-term growth that markets provide. Our role is to help you build a portfolio designed for precisely this kind of staying power. We structure your investment mix to help you weather market cycles without having to guess what will happen next. Educating Clients About Normal Market Cycles Another key aspect of fiduciary financial planning is helping clients understand what is “normal” in the market. Volatility is not a sign that something is broken. It is a natural part of how markets function. In fact, without volatility, markets would not offer the returns that make long-term investing so powerful. We work with clients to help them see: Why some years will be down, but others will be very strong Why trying to avoid all losses is neither realistic nor necessary How staying invested through cycles often leads to far better outcomes than jumping in and out of the market Perspective is everything . The more you understand market behavior, the less likely you are to make emotional decisions during downturns. Different Stages, Same Principles Our approach also adapts to the varying needs of clients at different stages of their financial journey. For clients in their 40s to 60s: We may focus on prudently preserving and growing wealth. We help manage sequence-of-returns risk as you approach retirement. We may emphasize income planning and portfolio sustainability. We ensure that your investment mix aligns with your evolving goals and risk tolerance. For clients in their 30s: We provide education about typical market cycles (especially if this is their first experience with volatility). We coach clients to take advantage of their longer time horizons. We help younger investors see downturns as buying opportunities, not threats. In all cases, we are committed to helping clients invest with confidence, regardless of the headlines. Ready to Build a More Resilient Investment Strategy? Market volatility will always be part of investing, but it doesn't have to derail your financial goals. As your trusted financial advisor Coeur d'Alene team, we're here to help you navigate market uncertainty with confidence through our comprehensive financial planning approach. Contact Five Pine Wealth Management today to discuss how our investment philosophy and comprehensive financial planning approach can help you navigate market uncertainty with confidence. To see how we can help you support your financial goals, send us an email or call us at 877.333.1015.  Whether you're looking to preserve the wealth you've already accumulated or build a foundation for long-term growth, our team has the experience and commitment to help you stay focused on what matters most: achieving your financial goals.

From Full House to Financial Freedom: Smart Money Moves for Empty Nesters

May 23, 2025
The day your last child leaves home hits differently. It’s not just about the quiet hallways or fewer groceries in the cart. It’s the moment you realize that the life you’ve known for 20+ years is evolving into something new. For many, that change is deeply emotional. But it’s also a golden opportunity. At Five Pine Wealth Management, we work with parents who are entering this new season of life. Maybe you’re celebrating. Perhaps you’re feeling uncertain. Likely, you’re feeling a mix of both. This new chapter comes with financial freedom and decisions to match wherever you land. Let’s explore the smart financial moves you can make as empty nesters. Empty Nesters: A New Financial Season Meet Rob and Dana. After 25 years of raising three kids, their youngest finally left for college last fall. Their house, once bustling with backpacks, soccer cleats, and half-eaten cereal bowls, suddenly felt oversized and eerily quiet. They weren’t used to grocery bills being cut in half or weekends without games and activities. But what really surprised them? Just how much less money was going out each month. They came to us with a familiar feeling: a mix of excitement and uncertainty. "We think we're in a good place," Dana said. "But are we doing what we should be doing?" This is where a financial check-in becomes vital. With fewer day-to-day expenses and more flexibility, this is a time to refocus your finances. Here’s where to focus: Revisit your monthly budget. Your spending needs have probably changed. Without dependents at home, you may find new flexibility. Redirect those dollars toward long-term goals. Refresh your financial goals. That dream trip to Italy or the kitchen renovation you’ve put off? Let’s pencil it in, but also ensure your retirement accounts are getting the love they need. Update your estate plan. Now that the kids are young adults, your wills, healthcare directives, and beneficiaries may need adjusting. Freedom looks different for everyone, but for many, it starts with clarity. Pre-Retirement Planning: Your Next Big Financial Milestone For most empty nesters, retirement is no longer a distant concept—it’s getting real. Pre-retirement planning becomes a critical focus, especially in your late 40s to mid-60s. This is often the highest-earning period of your life and the sweet spot for pre-retirement planning. Here’s what we help our clients prioritize: Maximizing retirement contributions : As an empty nester, your cash flow could increase by 12% or more . Now’s the time to supercharge your 401(k), IRA, or other investment accounts with that extra cash. If you’re 50 or older, take advantage of catch-up contributions. Evaluating your risk exposure : Is your portfolio still aligned with your risk tolerance and timeline? Consider your tax strategy: With fewer deductions (like kids at home) and possibly a high-earning year, you may want to explore Roth conversions, charitable giving, or other tax-aware strategies. Running retirement projections : We help clients answer big-picture questions like: When can I retire? Will I have enough? What lifestyle can I realistically support? These aren’t always easy questions, but they’re essential. Planning for healthcare : Don’t wait until 65 to think about Medicare. Explore long-term care insurance and out-of-pocket expectations now. Rob and Dana sat down with us to run a retirement analysis. With only 8 years until Rob planned to retire, we helped them rebalance their portfolio to reduce risk, evaluate their pension and Social Security options, and make a plan to pay off their mortgage early. The result? They now have a clear retirement date and peace of mind. Should I Downsize My Home? One of the most common questions we get from empty nesters is, “Should I downsize my home?” It’s not just a financial question. It’s an emotional one, too. That house holds birthday parties, graduation photos on the stairs, and a dent in the drywall from a wild game of indoor tag. But it may also hold higher property taxes, more space than you use, and maintenance costs that don’t serve your current lifestyle. When deciding whether to downsize, we walk clients through: Total cost of ownership : What are you paying for the space? Emotional readiness : Are you ready to let go of the home? What would moving free up? : Cash for retirement? A move to your dream location? Family needs : Will your kids (or grandkids) be visiting regularly? Would a smaller home still support that? Downsizing doesn’t always mean moving into a tiny condo. Sometimes it means relocating to a one-level home with less yard or trading square footage for a better lifestyle. For Rob and Dana, downsizing meant moving to a townhome closer to their daughter and walkable to their favorite coffee shop, all while cutting their housing costs by nearly 35%. Give Yourself Permission to Dream Again One of our favorite things about working with empty nesters is helping them rediscover what they want. For years, life revolved around the kids. College tours. Dance recitals. Saturday mornings spent on the soccer sidelines. You were investing in their future. Now, it’s time to invest in yours. That might mean: Launching the business you put on hold Traveling during off-peak seasons (because you can!) Picking up a new hobby or volunteering more Creating a legacy through charitable giving or a family foundation Whatever it is, we want to help you align your money with your vision. Ready to Rethink the Next Chapter? This stage of life is full of opportunities, but it can also raise big questions. The good news is you don’t have to figure it all out on your own. Whether you're considering downsizing, exploring early retirement, or just want to know you’re on the right path, Five Pine Wealth Management is here to help you plan wisely, invest intentionally, and live fully.  Take advantage of this pivotal financial moment. Call (877.333.1015) or email us today to schedule your empty nester strategy session. The empty nest doesn't have to feel empty. It can be the launch pad for your next chapter of financial success.